Steve Irons (Swan, Liberal Party) Share this | Hansard source

It is a pleasure to follow the member for Fraser. I did not spend a day in university, while he spent 16 years there—I was not as fortunate as him—but I did learn to read while I was getting educated and one of the things I have read, in a book called Imagining Australia, is:

A deregulated or market-based HECS will make the student contribution system fairer, because the fees students pay will more closely approximate the value they receive through future earnings.

The author was Dr Andrew Leigh. I am pleased to speak on the Higher Education and Research Reform Amendment Bill 2014, because like my coalition colleagues I believe in creating a higher education system that will provide our universities with the legislative framework they need to deliver internationally competitive courses and to ensure our students are receiving a world-class education. It has long been recognised that Australia's higher education system needs to be overhauled to ensure our students are not left behind. All members in this place would agree that we want the best for our students—the best courses, the best facilities and the best teachers. If we are to achieve this, we cannot afford to stick to the status quo.

It was only a couple of weeks ago that I had the pleasure of welcoming the Minister for Education, the member for Sturt, to my electorate of Swan to host a policy roundtable. This was the second roundtable in a series of discussions which brought together stakeholders, including academics, educators and advocates from across Australia, to inform future discussion on how to best support students with disability and learning difficulties in Australian schools—just one of many initiatives being developed as part of this government's plan to put students first. The bill before the House today is a critical part of this plan. It will amend the Higher Education Support Act 2003 and will pave the way for much needed reform to Australia's higher education system while saving an estimated $3.9 billion over the forward estimates. It is the overhaul our education providers have been calling for, and it is the overhaul our students need if they want to compete in the globally competitive employment market.

In my home state of Western Australia the state's leading university, the University of Western Australia, as recently as last week renewed their calls for the federal parliament to 'support the deregulation of Australian universities to ensure Australia retains a world-class higher education system.' The University's Vice-Chancellor, Professor Paul Johnson also stated:

The status quo is not feasible as it will over time erode the quality of our education and research activities—not a good position to be in when our nearest Asian competitors are investing so heavily in these areas.

I could not have said it better myself.

For our universities to provide market-leading courses, it is clear that reform is needed. For our students to continue accessing higher education subsidies, reform is needed. And for loan support assistance under Australia's HELP loan scheme to be sustainable, reform is needed. That is exactly what this bill will achieve. Firstly, the bill will amend our higher education legislative framework to deregulate fees. This will remove the provision that limits the maximum amount that a Commonwealth-supported student may be charged by a provider. These changes will encourage competition between providers, with the aim being to create greater choice and a higher quality of courses for students.

This amendment has stirred much debate in the media and the community about its impact on students. I note that this debate has been largely driven by the scaremongering campaign of those opposite, despite the fact that Labor cut $6.6 billion in funding to higher education while they were in office, including more than $3 billion in their last year in office alone. While those opposite continue to criticise these reform measures, even the architect of the former government's education reforms, David Gonski, has backed the need to deregulate the education sector. In yesterday's edition of the Australian Mr Gonski called on the Labor Party to back the government's budget reforms, stating that:

… leaving the future of all of us to a few crossbenchers is sad.

Again, I could not agree more. Mr Gonski also backed the need to deregulate, stating, and I will paraphrase here, that rather than making universities richer, these additional funds could be ploughed back into the universities to make them even greater.

I was appalled by the actions of the students who recently tried to burn effigies of Minister Pyne during protests against this bill's reform measures. I am a firm believer in our democratic system and the right to protest but was dismayed by the actions of these students and by ongoing provocation in the media from those opposite. The reality of what will take place if these reform measures are passed is much less dramatic and was summed up distinctly in a recent editorial in the Australian Financial Review entitled 'Let the market work for universities', which was published on 23 May. The editorial stated that:

Feared price gouging by monopoly providers is likely to be kept in check by competition between universities and between sectors after Mr Pyne extended the higher education subsidies to TAFEs and approved private colleges. And the universities' need to attract foreign students will provide another check on what they can charge Australian students.

The editorial went on to say:

Fears that higher fees may make it harder for students from disadvantaged backgrounds to get a university education are not supported by the UK experience.

Under these changes:

Government funding was cut by 20% and universities allowed to charge up to a cap of £9,000 pounds, or $16,400. After a brief hiatus, student numbers continued to increase and the proportion of students from low-income families remained the same.

This is a far cry from the $100,000 degrees those opposite have claimed will be standard and the idea that access to participation will be reduced.

I question whether those opposite have in fact read the proposed bill, since a key measure is to expand access to higher education. We are achieving this by providing financial assistance to students studying diplomas, advanced diplomas and associate degrees and to bachelor and sub-bachelor courses offered by private providers and non-university higher education providers such as TAFE. This measure will provide Commonwealth support for more than 80,000 additional students each year by 2018 at a cost of $820 million over three years. Further expansions to the act will also allow certain New Zealand citizens who are in a special category of visa holders to be eligible for HELP assistance from 1 January 2015, and vocational education and training students will be able to borrow for those course fees. They will also no longer have to pay the 20 per cent fee that is charged to them but not to undergraduates in public universities. This will go hand-in-hand with the government's already-announced trade support loans, which provide apprentices with access to HECS-style loans of up to $20,000 for everyday costs, which they do not have to repay until they earn a decent living—just like the university students.

As a former electrical apprentice I understand the financial and transport challenges that apprentices face. My first take-home pay as an apprentice back in 1974 was $39 for one week, and most of my meagre income went on getting to work and getting home from work and on feeding myself. I am pleased that apprentices' conditions and pay have improved significantly since then, and the government's $1.9 billion investment in trade support loans will help to ease the financial burden faced by more than 5,000 apprentices currently undertaking training in the electorate of Swan.

This government is focused on increasing access to higher education. We recognise that to achieve this, scholarships currently play and will continue to play a significant role in ensuring this is attainable. That is why a key provision in this bill is that from 1 January 2016 all higher education providers with 500 or more Commonwealth-supported places will be required to direct 20 per cent, or $1 in every $5, of additional revenue from the fee deregulation to a Commonwealth scholarship scheme. Providers will use this funding to provide opportunities for disadvantaged students through assistance with tuition, accommodation, travel, learning support and other living costs that might otherwise stand in the way of success. Although these are key reform measures to provide greater access to higher education, they are a part of a tiered plan by this government to support our education sector.

Last month I had the pleasure of representing Minister Pyne at the official launch of Curtin University's AHEAD project in my electorate of Swan. This fantastic initiative received more than $3.5 million in funding under the government's higher education participation program to support and enhance higher education access for those who face greater barriers than others to participation. This project directly supports people to raise their expectations and aspire to participating in higher education and improving the life that they will have beyond their studies. It is an initiative that I will be watching with interest.

It is no secret that university students earn about 75 per cent more than non-graduates, or about $1 million more over their lifetime. What a lot of people are not aware of, however, is the actual contribution these students make to their university education. Students currently pay around 40 per cent on average towards the cost of their education, with the taxpayer paying the remaining 60 per cent. Under the proposed reform measures, this government will be asking students to pay a small amount more towards these costs. From January 2016 students will instead be required to contribute around 50 per cent of the costs. They will be required to make this contribution, but the current safeguard of HELP loans will remain. The minimum repayment threshold for HELP debts will, however, change to 90 per cent of the current income threshold.

Currently, taxpayers are not required to start paying back their HELP loans until their annual incomes reach $53,345. The new threshold at which people will start repaying debts will be $50,638 in 2016-17. New indexation arrangements will also apply to HELP debts, with the current consumer price index rate being changed to the Treasury 10-year bond rate, which is the rate at which taxpayers borrow the funds. This will balance the rate at which students and taxpayers, as the lenders, borrow these funds—a rate that is far less expensive than a commercial loan. It is, however, important to note that students enrolled before the budget will continue to be charged under existing arrangements.

The bill will also discontinue the HECS-HELP benefit, due to low student intake, and will reduce subsidies for new students at universities by an average of 20 per cent. These reform measures are necessary to ensure Australia's HELP loans program and other subsidies are sustainable in the long term, with Australia's HELP debt increasing from around $16 billion in 2008 to around $30 billion in 2013. In the last year alone, the government provided about $5 billion in HELP loans, which is expected to increase to $10 billion in 2017. Those opposite have claimed that these changes will significantly impact on low-income earners' ability to maintain an adequate standard of living and may deter them from accessing higher education. However, as the bill's compatibility with human rights notes:

This will not impact on a person’s ability to enjoy an adequate standard of living as they do not have to repay their HELP loan until they reach a minimum income threshold. Additionally, the proportion of their annual income directed towards repayments will not change under this measure. Under the new indexation arrangements, students may take longer to repay their HELP loans, but will not suffer from a reduction in their annual disposable income as a result, and such will not alter their capacity to maintain an adequate standard of living.

Members in this place must also remember that HELP loans are not the only support measure available to students, who may also be eligible for youth allowance or Austudy assistance.

Other measures in the bill include expanding the Quality Indicators for Learning and Teaching, known as QILT, to provide students with the performance details of each private and public higher education institution to assist students in making informed decision about what they would like to study and where. Information will also be provided about how successful previous graduates have been at finding jobs and what other students and employers think of the course. Reforms to the Australian Research Council Act 2011 will also be made to enable universities to charge Research Training Scheme students a capped tuition fee of $3,900 for high-cost courses and $1,700 for low-cost courses. Again, safeguards are in place, with eligible students able to defer these costs by applying for a HELP loan.

Further amendments to the act include $11 billion over four years towards research in Australian universities, including $139 million for the Future Fellowships scheme and $150 million in 2015-16 to continue the National Collaborative Research Infrastructure—two important initiatives which would have ceased to exist under the Labor government. Instead, this government has recognised that supporting research and future innovations is critical for Australia's future and committed to providing 100 four-year Future Fellowships each year. This is on top of $150 million in funding that has already been committed by the Australian government to fund 150 new fellowships across the country—$2.7 million of which I recently welcomed in Swan to support four potentially groundbreaking science projects at Curtin University.

Despite the scaremongering campaign by those opposite, it is clear that these reform measures are necessary to facilitate greater access to higher education and to ensure those who opt to pursue this path will receive a globally competitive education from leading institutions. I commend the bill to the House.

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